Brazil's 2014 Corn Output to Shrink

The market reacted positively after last week's USDA report, but there is even more news that could bring a bullish trend, at least for corn prices: There are conflicting reports on the size of the 2013-14 crop in Brazil. Nevertheless, Agroconsult, a Brazilian private analyst firm, has guaranteed this week that extensive rains in the center-west of the country combined with a drought in southern states will make this year's grain crop smaller than in 2012-13.

After a technical crop expedition around Brazil with over 40,000 miles, the global consultancy announced that the Brazilian grain yields will not be bigger than 188.1 million tons. In 2013, the country had a grain output of 189 million tons. There would be an increase of almost 6% of the soybean crop to 86.75 million tons compared to 2013, reveals the estimate. Previously, the National Supply Company and the USDA had said that Brazil would have an output of 90 million tons. On the other hand, the corn production will reduce in 10 percentage points to 71.2 million tons (30 million in the summer and 41.2 million tons in the second crop), according to the Agroconsult's forecast.

"Different climate patterns were expected for this crop. We are not having a record crop. Brazil will not overcome the U.S. production in 2014-2015 as well," says Agroconsult's André Pessoa, an agronomist.

Also contrary to what was expected, the incidence of the caterpillar Helicoverpa Armigera was not that frequent, but soybean rust, climate instability, and the Soybean Looper were pointed out as the main factors of smaller productivity. "Farmers have worried too much about that new caterpillar and forgot about all the rest," explains Pessoa in a press release.

Porto Alegre-based consultant Carlos Cogo revealed his own numbers for the Brazilian crop yesterday. Cogo's prediction for soybean crop is 85.2 million tons, while the corn output would be 73.8 million tons.

For the analyst, the bullish factor on soybeans would lie on the pace of the sales. In March, the country sold 6.23 million tons of the oilseed.

"There will be records of soybean shipments in April. Clearly, there will be sales anticipations. This happens because of the usage of early soybean varieties in Cerrado (vegetation)," Cogo noted in an interview with Agriculture.com.